In June 2007, Sartorius AG acquired the French company, Stedim S.A., and a global solution provider for the biopharmaceutical industry was created. Since then, the new company — Sartorius Stedim Biotech (SSB) — has entered into collaborations with a number of other key industry players, including Metroglas, Bayer Technology Services GmbH and the recently acquired Wave Biotech AG to bring technologies such as single-use bioreactors, UVC irradiation and the first disposable–integrated electrochemical pH sensor into its rapidly expanding product portfolio. Since the Stedim acquisition, SSB has developed a broad range of turnkey single-use technologies, anticipating market trends and keeping one step ahead of the competition. As the biomanufacturing industry moves ever closer to the concept of fully integrated, totally disposable processes, Dr Kevin Robinson spoke with Dr Joachim Kreuzburg, CEO and Chairman of the Board of SSB, to find out more about the company’s recent activities, what’s driving the sector forward and what the future holds for this dynamic and innovative organization.
KSR: Nearly two years after the milestone merger with Stedim, are you satisfied with the status of the integration process?
JK: Yes, indeed, we’re definitely satisfied with the progress of the integration. But, we should keep in mind that we are still in the early stages of a long journey, so it would be wrong to say that everything is finalized and completely in place, but most of the integration tasks are done. However, our preparations were very thorough and we benefited from having a few months between the announcement and the actual completion of the contract. As such, we were able to ensure that a completely integrated organization was in place, offering a combined marketing approach, branding, a dynamic start and positive forward momentum. What we have seen, recently, is that the marketing environment in the US has become quite difficult, particularly during the last 12–18 months, which has had some effect on the integration, but I’m pleased to say that, despite the recession, the organization is stronger now than it has ever been before.
KSR: What does the company offer their customers today and what feedback have you received from the industry?
JK: I believe that Sartorius Stedim Biotech offers one of the most complete product portfolios in the biomanufacturing industry — from upstream to downstream applications — that addresses current production requirements and developing trends; we are able to increase process efficiencies, shorten lead times and improve our customers’ productivities. Regarding feedback from the industry, we are nowadays definitely on the shortlist of any biopharmaceutical manufacturer looking to improve its processes and they look at us as a “preferred supplier.” And this is a direct result of being able to offer a unique product portfolio on a global basis.
KSR: Looking at the current R&D activities of SSB and co-operations with other biotech companies, what’s the driving force behind the company’s strategy and its rapid development?
JK: Well, we are a very open company that constantly looks to complete its offering by providing technologies that are complementary to those that we already have. This is based on two main cornerstones: our strategic marketing approach embodies the concept of being a full service provider to our customers, and we are driven by the needs of those end-users to improve their processes. We don’t just consider what’s currently available in our portfolio; we want to anticipate future requirements. The second, equally important, cornerstone is that, with time, our R&D department has become a technology integrator. What we see in some companies, to a greater or lesser extent, is the “not invented here” syndrome. Some organizations focus on high-quality filtration equipment, for example, and consider everything else to be substandard. Our R&D team is very experienced and proficient at integrating new technologies into the solutions and systems we offer. These two factors, strategic marketing and technology integration, are our driving force and the basis for tomorrow’s success.
KSR: How does this strategy manifest itself in different geographies, such as the US, EU and Asian markets?
JK: We approach the global market in a uniform manner. We see the markets in different countries and geographies as being at different stages of development but, overall, we operate a global strategy as a worldwide organization and offer the same products and solutions wherever the customer is based. Whether in Europe, the US or Asia, our customers can expect the same service and offerings. We are still expanding our global footprint but I think we are pretty much present in practically every region and relevant market in the world; we have recently opened new subsidiaries in Asia, such as a technical support centre in Singapore and, mid-2009, we will inaugurate a new facility in India.
Dr Joachim Kreuzburg CEO and Chairman of the Board Sartorius Stedim Biotech S.A. (www.sartorius-stedim.com)
KSR: The company slogan is “turning science into solutions.” What does this mean for your product portfolio, your R&D activities and new technologies?
JK: When it comes to new technological trends and scientific discoveries, we always have the thought in mind: how can we use these findings to add value to our customers? We really want to convert these new technologies into solutions that solve problems for our clients. That means we are constantly adding new products to our portfolio, to become a more complete solution provider and enhance our offering as an R&D technology integrator.
KSR: The pros and cons of disposables are still being debated. Which way will the balance tip in the next few years and what kind of biotech developments do you expect to see?
JK: We believe there will be a continuing trend towards single-use systems and disposable products, such as bioreactors, because their inherent economic and ecological advantages like reduced downtime and contamination risk, more flexibility and less expensive cleaning and validation favour the use of intelligent, single-use solutions. We don’t expect to see a complete disposable-designed factory in the near future, but rather the tailor made integration of single-use systems. Each process is unique and disposable technologies will need to be able to be easily connected to classic, reusable stainless steel equipment. In this regard, hybrid manufacturing design will also become more and more important. However, we definitely expect that single-use systems will substantially increase their share of biopharmaceutical production.
KSR: You’ve already positioned the company as a total solution provider, how do you think this offering might change as biomanufacturing evolves?
JK: Right now, our customers are looking for more and more integrated, single-use systems. At the same time, it will become increasingly important to help them transfer their processes to single-use equipment, instead of multi-use equipment. In the long-term, being a one-stop-shop may not be sufficient, and that’s not how we’re positioning ourselves. The aim of the supplier should be to help the customer to significantly improve its productivity and efficiency, and also maintain the highest standards of quality and safety. In that domain, we will see significant improvements during the next few years.
KSR: Is that how Sartorius Stedim Biotech plans to stay one step ahead of its competitors as a solutions provider?
JK: Definitely! Looking at our fluid management strategy, for example, and our bag business, simply being a bag supplier does not really constitute adding value. But when you talk about intelligent bags — assembled with sensors and/or mixing technologies, etc. — then you have an offering that can improve the customer’s process, which does add value, and helps to differentiate us from the competition. These items form an increasingly important part of our product portfolio.
KSR: Further to the recent acquisition of Swiss Wave Biotech and your activity with Bayer Technology Services, does Sartorius Stedim Biotech have its eye on any other M&A activity during the next 2–3 years?
JK: Both the Wave and BTS UVC technologies will help to raise the quality of our customers’ processes to the next level. Regarding the Wave acquisition, this was a logical step for us after we developed an exclusive and technical collaboration with the management of Wave. We see disposable bioreactors as one of the strongest growth sectors in our product portfolio; our customers are pushing the market for a more comprehensive offering of completely integrated disposable bioreactors that are fully scalable for a variety of cell culture applications. At this stage of the relationship, we saw that it was the right time to integrate the technology into our own offering. There are numerous benefits, such as implementing mixing or sensor technologies into disposable bioreactors that we can now do in-house. In addition, there is the synergy between our existing bag business and Wave, and between the former B. Braun Biotech International and its fermentation and sensor technology – acquired by Sartorius in 2000 – and Wave for cell culture applications.
This is a period of development for the industry, when single-use technologies are becoming accepted on a much broader base than ever before and many companies are running initiatives to assess their efficiencies and supplier base.
KSR: What do you see as the biggest hurdles and challenges for the biopharm industry during the next few years?
JK: We are all aware that the entire global pharmaceutical industry’s product pipeline is very much dominated by biotech drugs. As such, I believe that the biotech industry, as a subsector of the Pharma industry, has a very bright and positive outlook for the next few years. We also know that any developments in this industry never follow an easy path but, because of its strong product pipeline, I believe that biotech will grow over-proportionally. Of course, there are always challenges: there will be an increased focus on operational excellence, which will include reducing production costs, and improving supply chain and inventory management; some areas of the industry will be affected by biosimilars; and, as ever, there is the omnipresent risk of increasingly stringent legislation. Overall, however, the future is bright, but there will be a greater demand for companies to run their processes more efficiently, control their investments more wisely and improve their facility management.
KSR: On the topic of investment, biotechnology was recently referred to as a safe haven for investors: do you think this is still true?
JK: I think this is very dependent on the size and business model of the company in question. In general, I believe that the biopharmaceutical industry will outperform the overall drug market. But if we’re talking about smaller biotech companies with a limited portfolio of drugs under development, then I think raising capital in the current economic climate would be quite challenging.
KSR: Is it true that the use of CMOs/CROs and the drive towards being a green and sustainable industry are also affecting the biotech sector?
JK: To give an example, there is an ongoing discussion regarding the ecological impact of single-use products compared with multi-use equipment. We believe that because of the high demand for water and energy to clean and sterilize multi-use equipment, single-use products — when made and used intelligently — are superior to multi-use equipment. This also means that in a working environment wherein the everyday costs of utilities such as water are getting higher and higher, there won’t be a direct contradiction between economic efficiency and ecological efficiency. Therefore, I believe that, in an economic sense, bioproduction is becoming more and more efficient and, subsequently, more green and sustainable. Regarding contract manufacturers, we may well see the development of very different business models in the next few years. We will see pharmaceutical companies that focus their efforts on marketing and sales, and rely heavily on both CROs and CMOs for R&D and production, whereas others will operate a much more integrated system. Some players will focus on their own products, others will focus on generics and a third group will evolve that will focus on both. We will see a divergence of business models.
Dr Joachim Kreuzburg CEO and Chairman of the Board Sartorius Stedim Biotech S.A. (www.sartorius-stedim.com)
KSR: Where is the innovation in biomanufacturing … and how will this manifest itself in the pharmaceutical industry?
JK: There is a revolution taking place in the basic paradigm of the biomanufacturing industry; not very long ago, most biopharm companies would not have considered using disposable bioreactors. Today, many of those companies are utilizing this technology at the laboratory or scale-up step of their processes. The fundamental innovation going on is the strong trend and paradigm shift towards single-use technologies and disposables, which is quite significant. There are some process steps wherein this shift is more intense. For example, viral filtration has employed single-use products for some time, but the use of disposable bioreactors and the use of disposables in purification steps has really shifted into high gear.
KSR: How will Sartorius Stedim Biotech develop in the next 3–5 years?
JK: We are currently at the beginning of a phase wherein the company is benefiting from the merger of Sartorius’ Biotechnology division with Stedim Biosystems; the new identity is starting to kick in and become visible. It is a period of development for the industry, when single-use technologies are becoming accepted on a much broader base than ever before and many companies are running initiatives to assess their process efficiencies and their global supplier base. They are focusing on strategic suppliers and process innovation, which will subsequently benefit Sartorius Stedim Biotech as we have positioned ourselves exactly to address these issues. I believe we will see dynamic and positive developments within the next 3–5 years that will put the company in a very strong position; the landscape and environment for biomanufacturing will favour a limited number of integrated solution suppliers, and Sartorius Stedim Biotech will be one among that number.